by: stan a. szlapetis director of software services rfid
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By: Stan A. SzlapetisBy: Stan A. SzlapetisDirector of Software ServicesDirector of Software Services
RFIDRFID
By: Stan A. SzlapetisDirector of Software Services
AgendaAgenda
What is RFIDWhat is RFID History of RFIDHistory of RFID How is RFID Used and by WhomHow is RFID Used and by Whom RFID In DistributionRFID In Distribution RFID BasicsRFID Basics RFID Tags and EquipmentRFID Tags and Equipment EPC Global EPC Global
By: Stan A. SzlapetisDirector of Software Services
What is RFIDWhat is RFID
Radio Frequency IdentificationRadio Frequency Identification ““Smart Label”Smart Label”
By: Stan A. SzlapetisDirector of Software Services
RFID HistoryRFID History
Developed in 1940’sDeveloped in 1940’s Commercialized in early 1980’sCommercialized in early 1980’s Smart Labels introduced in late Smart Labels introduced in late
1990’s1990’s EPCglobal US™ was formed in 2003EPCglobal US™ was formed in 2003 Significant supply chain utilization Significant supply chain utilization
20042004
By: Stan A. SzlapetisDirector of Software Services
RFID ApplicationsRFID Applications MilitaryMilitary Livestock TrackingLivestock Tracking Industrial/Production Process Industrial/Production Process Sortation Systems (Travel & Post)Sortation Systems (Travel & Post) Access ControlAccess Control Pharmaceutical Electronic Pedigree Pharmaceutical Electronic Pedigree Asset TrackingAsset Tracking Supply Chain/DistributionSupply Chain/Distribution
By: Stan A. SzlapetisDirector of Software Services
Real Customer RFID Real Customer RFID DeploymentDeployment
Manufacturing and Item Level TaggingManufacturing and Item Level Tagging Purdue, HD Smith, Astra-ZenicaPurdue, HD Smith, Astra-Zenica
Industrial ManufacturingIndustrial Manufacturing Pacific Cycle, Boeing, International PaperPacific Cycle, Boeing, International Paper
Supply Chain and RetailSupply Chain and Retail Wal-Mart, Target, Albertsons, Sam’s ClubWal-Mart, Target, Albertsons, Sam’s Club
Routing and Sortation Routing and Sortation (luggage & parcels)(luggage & parcels) Virgin Atlantic, Hong Kong Intl AirportVirgin Atlantic, Hong Kong Intl Airport
By: Stan A. SzlapetisDirector of Software Services
Retail Supply Chain RFID Retail Supply Chain RFID Adopters Adopters
Wal-MartWal-Mart Target Target AlbertsonsAlbertsons CCECCE Price ClubPrice Club
By: Stan A. SzlapetisDirector of Software Services
Example of RFID Example of RFID ImplementationImplementation
You instantly know exactly
what you have.
Store Staging Area. (or palletizing)
You already know who’s waiting for it.
You instantly verify what goes out.
You instantly confirm what you received and the the store has it.
When a case serial # is
scrapped, you know it’s on the
shelf.
Exception Lane.
More reliable reading minimizes work in this area.
Receiving Area
(from production or from suppliers)
By: Stan A. SzlapetisDirector of Software Services
Advantages over Similar Advantages over Similar Barcode SystemsBarcode Systems
All RFID tags are read on the pallet at All RFID tags are read on the pallet at once* once*
Save time in scanning each box individually Save time in scanning each box individually as you would with barcodesas you would with barcodes
Handles variable size boxes more Handles variable size boxes more effectively than scanner based systemeffectively than scanner based system
Less sensitive to label orientationLess sensitive to label orientation
* Theoretically – some products may be more difficult to read than others* Theoretically – some products may be more difficult to read than others
By: Stan A. SzlapetisDirector of Software Services
Benefits of RFID in Benefits of RFID in DistributionDistribution
Reduce laborReduce labor Smart shelves tell you when Smart shelves tell you when
you’re out of stockyou’re out of stock Reduce theftReduce theft Full visibility through supply chainFull visibility through supply chain Reduce Inventory (safety stock)Reduce Inventory (safety stock) Certification of authenticityCertification of authenticity
By: Stan A. SzlapetisDirector of Software Services
Wal-Mart OverviewWal-Mart Overview
Supplier Wal-Mart DC
Wal-Mart Store 1
Wal-Mart Store 2
Wal-Mart Store 3
Retail Link
By: Stan A. SzlapetisDirector of Software Services
RFID StandardsRFID Standards
Several Application & Communication Several Application & Communication Standards ExistStandards Exist
Tracking AnimalsTracking Animals Smart CardSmart Card EPC Global Gen 1 & Gen 2EPC Global Gen 1 & Gen 2 ISO 18000-3 (HF)ISO 18000-3 (HF) ISO 18000-6 A/B (UHF)ISO 18000-6 A/B (UHF)
Wal-Mart Adopted EPC StandardWal-Mart Adopted EPC Standard
By: Stan A. SzlapetisDirector of Software Services
Difference between ISO and Difference between ISO and EPCEPC
The Electronic Product Code (EPC) is a standard The Electronic Product Code (EPC) is a standard created by EPCglobal. created by EPCglobal.
EPC is more than tags and reader communication. EPC is more than tags and reader communication. EPCglobal wants a network standard for how data EPCglobal wants a network standard for how data is shared among various organizations.is shared among various organizations.
ISO is also working on standards for tracking ISO is also working on standards for tracking goods in the supply chain using HF and UHF tagsgoods in the supply chain using HF and UHF tags
It is envisioned that EPC standard will also It is envisioned that EPC standard will also become ISO 18000-6C standardbecome ISO 18000-6C standard
By: Stan A. SzlapetisDirector of Software Services
RFID Tag BasicsRFID Tag Basics
An RFID tag contains a small Chip An RFID tag contains a small Chip (computer, memory, radio, and power) (computer, memory, radio, and power) and Antennas, mounted on a Substrateand Antennas, mounted on a Substrate
Active, Semi-Passive, or PassiveActive, Semi-Passive, or Passive Single or Double DipoleSingle or Double Dipole Read/Write, Write Once/Read Many, Read/Write, Write Once/Read Many,
Read-OnlyRead-Only
By: Stan A. SzlapetisDirector of Software Services
Common FrequenciesCommon Frequencies
Low Frequency (125 and 134.2 kHz)Low Frequency (125 and 134.2 kHz) High Frequency (13.56 MHz)High Frequency (13.56 MHz) Ultra High Frequency* (865-869 MHz Ultra High Frequency* (865-869 MHz
in Europe, 902-928 MHz in US, 905-in Europe, 902-928 MHz in US, 905-956 MHz in Japan)956 MHz in Japan)
Microwave (2.54 GHz and 5.8 GHz)Microwave (2.54 GHz and 5.8 GHz)
* EPC Gen 2 Frequency Range* EPC Gen 2 Frequency Range
By: Stan A. SzlapetisDirector of Software Services
Active & Passive TagsActive & Passive Tags
Passive RFID requires reader to Passive RFID requires reader to create an RF field that energizes the create an RF field that energizes the tag for communication (reader talks tag for communication (reader talks first)first)
Active RFID requires the tag to have Active RFID requires the tag to have it’s own power and normally the tag it’s own power and normally the tag broadcasts it’s presence to the reader broadcasts it’s presence to the reader first (tag talks first)first (tag talks first)
By: Stan A. SzlapetisDirector of Software Services
EPC Tag ClassesEPC Tag ClassesCLASS TAG CAPABILITY
Class 0 Read Only (64 or 96 bits)
Class 1 Write Once, Read Many (64 or 96 bits)
Class 0+,Class 2
Read, Write (96 or 256 or 512 bits)
Class 3Class 2 Capabilities + Power for longer
range or advanced functions.
Class 4Class 3 Capabilities + Ability to
communicate with other active tags.
Class 5Class 4 Capabilities + Ability to
communicate with passive tags.
By: Stan A. SzlapetisDirector of Software Services
Generation 2 Generation 2 CharacteristicsCharacteristics
Single world wide standardSingle world wide standard Less power to power the tag up (more time, longer Less power to power the tag up (more time, longer
reader distance)reader distance) Faster tag to reader communicationFaster tag to reader communication Improved write speed (5 tags/sec vs. 3)Improved write speed (5 tags/sec vs. 3) Improved singulation protocol (“Q” Protocol)Improved singulation protocol (“Q” Protocol) Encryption of tag to reader communicationEncryption of tag to reader communication Dense reader operationDense reader operation Up to 512 bit item ID (vs. 96 bit item ID)Up to 512 bit item ID (vs. 96 bit item ID) 32 bit lock and kill password (vs. 8 bit)32 bit lock and kill password (vs. 8 bit)
By: Stan A. SzlapetisDirector of Software Services
RFID vs. BarcodeRFID vs. Barcode
BARCODE RFID
Optical, line of sight required
Wireless, no line of sight required
Reads one object at a time
Read many objects at once
Changes require a new label to be printed
Changes can be reprogrammed on the fly
Labels are less expensive
Tags are more expensive
By: Stan A. SzlapetisDirector of Software Services
Mapping Barcodes to EPC Mapping Barcodes to EPC GTINGTIN
By: Stan A. SzlapetisDirector of Software Services
RFID TagsRFID TagsREAD ONLY AND
READ/WRITEINLAYS FOR PALLET
TAGS INLAYS FOR CASEINLAYS FOR ITEM TAGS
Best Best PerformancePerformance
4x44x4 1x61x6 2 x 22 x 2
Better Better PerformancePerformance
3x33x3 2x42x4 1x41x4
Good Good PerformancePerformance
1x6 1x6 1x4 1x4 1x11x1
By: Stan A. SzlapetisDirector of Software Services
RD5000 ReaderRD5000 Reader Compact, Rugged, PortableCompact, Rugged, Portable Can be installed almost Can be installed almost
anywhere on material handling anywhere on material handling equipment such as forklifts and equipment such as forklifts and clamp trucks, on mobile carts, clamp trucks, on mobile carts, portable skate wheel conveyors portable skate wheel conveyors or even in hard to reach or even in hard to reach locations where a cabled fixed locations where a cabled fixed reader would not be practical. reader would not be practical.
EPC Gen 2 OnlyEPC Gen 2 Only
Features100% free of network, power and
antenna cables
Integrated 802.11a/b/g WLAN radios
Integrated Bluetooth
Integrated rugged antenna
Integrated battery with optional external power source
Interactive sensing technologies: acceleration sensor and proximity sensor
IP66 sealing
MC9000 series compatible battery and chargers
By: Stan A. SzlapetisDirector of Software Services
XR400 Smart ReaderXR400 Smart Reader
Simultaneous support for EPC Gen 1 & Gen 2 tagsSimultaneous support for EPC Gen 1 & Gen 2 tags Hosts applications directly on the readerHosts applications directly on the reader Enterprise connectivity (Ethernet, Serial, USB, Enterprise connectivity (Ethernet, Serial, USB,
digital I/O) & Remote Managementdigital I/O) & Remote Management Up to 4 read pointsUp to 4 read points Best in class reader performanceBest in class reader performance Best in class dense reader performanceBest in class dense reader performance Reads as well as writes to tagsReads as well as writes to tags
By: Stan A. SzlapetisDirector of Software Services
XR400 Smart Reader XR400 Smart Reader ApplicationsApplications
Conveyor ReadersConveyor Readers Forklift ReadersForklift Readers Dock Door ReadersDock Door Readers
By: Stan A. SzlapetisDirector of Software Services
Reader Forklift MountReader Forklift Mount
Forklift still needs a RF terminal with a Forklift still needs a RF terminal with a display for commands and directiondisplay for commands and direction
By: Stan A. SzlapetisDirector of Software Services
DC600 Advanced Portal DC600 Advanced Portal System System
Turn-key solutionTurn-key solution Integrated XR400 Reader and Integrated XR400 Reader and
High performance antennasHigh performance antennas Enterprise deployableEnterprise deployable Easy to install, manage and Easy to install, manage and
maintainmaintain ModularModular Audio & visual alertsAudio & visual alerts
By: Stan A. SzlapetisDirector of Software Services
MC9000-G RFID Rugged MC9000-G RFID Rugged HandheldHandheld
¼ VGA Display¼ VGA Display Variable Distance Barcode Variable Distance Barcode
ReaderReader EPC Class 0, 1 & Gen 2 EPC Class 0, 1 & Gen 2
Compliant RFID ReaderCompliant RFID Reader Integrated Directional Antenna Integrated Directional Antenna 802.11b Connectivity802.11b Connectivity ProgrammableProgrammable Microsoft Windows CE.NET, Microsoft Windows CE.NET,
Microsoft Mobile 2003Microsoft Mobile 2003
By: Stan A. SzlapetisDirector of Software Services
PrintingPrinting Number of printers and Number of printers and
printer/applicators are available on the printer/applicators are available on the market that print, encode and verify market that print, encode and verify RFID labelsRFID labels
Toshiba TEC offers 4 RFID Ready Toshiba TEC offers 4 RFID Ready Thermal Printers: BSX-4, BSX-5, BSX-Thermal Printers: BSX-4, BSX-5, BSX-8 and the B-SA4.8 and the B-SA4.
Can print and encode HF or UHF tagsCan print and encode HF or UHF tags Toshiba TEC has successfully used Toshiba TEC has successfully used
back-scatter UHF in R/W tests.back-scatter UHF in R/W tests. Ribbon Save, BCI and the RFID Ribbon Save, BCI and the RFID
Analyze Tool are unique to Toshiba Analyze Tool are unique to Toshiba TEC.TEC.
By: Stan A. SzlapetisDirector of Software Services
EPC GlobalEPC Global
EPCglobal Inc™ is a joint venture of GS1 US™ EPCglobal Inc™ is a joint venture of GS1 US™ (formerly the Uniform Code Council, Inc.®) and (formerly the Uniform Code Council, Inc.®) and GS1 (formerly EAN International)GS1 (formerly EAN International)
Committed to standards-based global supply chain Committed to standards-based global supply chain solutionssolutions
EPCglobal Inc is an open, worldwide, not-for-profit EPCglobal Inc is an open, worldwide, not-for-profit consortium of supply chain partners working to consortium of supply chain partners working to drive global adoption of the EPCglobal Network™. drive global adoption of the EPCglobal Network™.
EPCglobal Network will provide for immediate, EPCglobal Network will provide for immediate, automatic and accurate identification of any item in automatic and accurate identification of any item in the supply chain of any company, in any industry, the supply chain of any company, in any industry, anywhere in the world.anywhere in the world.
By: Stan A. SzlapetisDirector of Software Services
EPCglobal Inc™ StandardEPCglobal Inc™ Standard
EPC deals with more than just how EPC deals with more than just how tags and readers communicate. tags and readers communicate.
Create network standards to govern Create network standards to govern how EPC data is shared among how EPC data is shared among companies and other organizationscompanies and other organizations
By: Stan A. SzlapetisDirector of Software Services
Data ExchangeData Exchange
Data synchronization is required Data synchronization is required through the GS1 – Global Data through the GS1 – Global Data Synchronization Network (GDSN)Synchronization Network (GDSN)
Tags must be in EPC Data FormatTags must be in EPC Data Format UCCnet is Wal-Mart’s network partnerUCCnet is Wal-Mart’s network partner
By: Stan A. SzlapetisDirector of Software Services
What is GDSNWhat is GDSN
GDSN performs 3 key functions:GDSN performs 3 key functions: Item RegistryItem Registry Standards ValidationStandards Validation Data Synchronization of Item DataData Synchronization of Item Data
By: Stan A. SzlapetisDirector of Software Services
Benefits of GDSNBenefits of GDSN
Eliminates re-keying of dataEliminates re-keying of data Maintains accuracy of dataMaintains accuracy of data Sets StandardsSets Standards Speeds Up Item Introduction and CreationSpeeds Up Item Introduction and Creation Wide scope RFID Identification of ItemsWide scope RFID Identification of Items Delivers Trade Item data in consistent Delivers Trade Item data in consistent
formatformat Simplifies Supply Chain ManagementSimplifies Supply Chain Management
By: Stan A. SzlapetisDirector of Software Services
Wal-Mart’s Retail LinkWal-Mart’s Retail Link
Wal-Mart will NOT use the EPC Wal-Mart will NOT use the EPC Network at this timeNetwork at this time
Wal-Mart will use Retail LinkWal-Mart will use Retail Link Primary method for sharing EPC Primary method for sharing EPC
informationinformation Allows Suppliers to see the same Allows Suppliers to see the same
information that Buyers and information that Buyers and Replenishment Managers can seeReplenishment Managers can see
By: Stan A. SzlapetisDirector of Software Services
Automation AssociatesAutomation Associates
RFID Technology is not perfect but great strides are being made
AAI is Symbol RFID certified Ready to help you with your RFID
project
By: Stan A. SzlapetisDirector of Software Services
TerminologyTerminology
EPC – Electronic Product CodeEPC – Electronic Product Code GTIN – Global Trade Item NumberGTIN – Global Trade Item Number SGTIN – Serialize GTINSGTIN – Serialize GTIN ONS – Object Name ServicesONS – Object Name Services RFID – Radio Frequency IdentificationRFID – Radio Frequency Identification SSCC – Serialized Shipping Container CodeSSCC – Serialized Shipping Container Code GDSN – Global Data Synchronization NetworkGDSN – Global Data Synchronization Network EPCIS – EPC Information ServicesEPCIS – EPC Information Services GIAI – Global Individual Asset IdentifierGIAI – Global Individual Asset Identifier GRAL – Global Returnable Asset IdentifierGRAL – Global Returnable Asset Identifier URI – Uniform Resource IdentifierURI – Uniform Resource Identifier URN – Uniform Resource NameURN – Uniform Resource Name SGLN – Serialized Global Location NumberSGLN – Serialized Global Location Number
By: Stan A. SzlapetisDirector of Software Services
Why RFID in DistributionWhy RFID in Distribution
On average 7.1%* of SKU’s are Out-of-On average 7.1%* of SKU’s are Out-of-stock (up to 30% in some categories)stock (up to 30% in some categories)
Out of stock costs retailers $69B in lost Out of stock costs retailers $69B in lost revenue**revenue**
Delays in getting the product to the store Delays in getting the product to the store and to the shelf impacts salesand to the shelf impacts sales
Most stock is available but not on shelfMost stock is available but not on shelf*Source: Efficient Consumer Response (ECR) Europe
** ** Retail Out of Stocks: A Worldwide Examination of Extent, Causes and Consumer Response, Emory Univ, Univ. of St Gallen, and Unvi. Of
Colorado, 2002
By: Stan A. SzlapetisDirector of Software Services
Wal-Mart’s Cost JustificationWal-Mart’s Cost Justification
$6.7 Billion: Reduce labor costs by 15%. Eliminating scanning of bar codes on pallets $6.7 Billion: Reduce labor costs by 15%. Eliminating scanning of bar codes on pallets and cases in the supply chain and on items in the store. and cases in the supply chain and on items in the store.
$600 Million: Reduce out-of-stock situations. The company boosts its bottom line by $600 Million: Reduce out-of-stock situations. The company boosts its bottom line by using smart shelves to monitor on-shelf availability. using smart shelves to monitor on-shelf availability.
$575 Million: Reduces administrative error and vendor fraud by scanning products $575 Million: Reduces administrative error and vendor fraud by scanning products automatically. Knowing where products are at all times makes it harder for employees automatically. Knowing where products are at all times makes it harder for employees to steal goods from warehouses. to steal goods from warehouses.
$300 Million: Better tracking of the more than 1 billion pallets and cases that move $300 Million: Better tracking of the more than 1 billion pallets and cases that move through its distribution centers each year. through its distribution centers each year.
$180 Million: Reduce inventory and the annual cost of carrying that inventory. $180 Million: Reduce inventory and the annual cost of carrying that inventory. Improved visibility in the supply chain, in its own distribution centers and its suppliers' Improved visibility in the supply chain, in its own distribution centers and its suppliers' warehouses. warehouses.
$8.35 Billion: Total pre-tax saving is higher than the total revenue of more than half the $8.35 Billion: Total pre-tax saving is higher than the total revenue of more than half the companies on the Fortune 500. companies on the Fortune 500.
By: Stan A. SzlapetisDirector of Software Services
Scope of Wal-Mart RFID Scope of Wal-Mart RFID RequirementsRequirements
Wal-Mart is responsible for 17 percent of Wal-Mart is responsible for 17 percent of retail volume worldwide retail volume worldwide
Receives on average 8 billion cartons a Receives on average 8 billion cartons a yearyear
First phase targets its top 100 suppliers First phase targets its top 100 suppliers who are responsible for one-eighth of who are responsible for one-eighth of those cartonsthose cartons
In other words, 1 billion cartons will need In other words, 1 billion cartons will need to be tagged. to be tagged.
By: Stan A. SzlapetisDirector of Software Services
Wal-Mart RFID Tagging Wal-Mart RFID Tagging GuideGuide
By: Stan A. SzlapetisDirector of Software Services
Quality ExpectationsQuality Expectations
Case & Pallet tag data needs to be verified Case & Pallet tag data needs to be verified prior to receipt at Wal-Martprior to receipt at Wal-Mart
100% Read Rate for Pallet Tags, but not 100% Read Rate for Pallet Tags, but not all cases need to be readable from in the all cases need to be readable from in the pallet configurationpallet configuration
100% Read Rate of Case Tags on 100% Read Rate of Case Tags on ConveyorConveyor
96 bit Class 0, 1,0+and Gen 2 tags are 96 bit Class 0, 1,0+and Gen 2 tags are acceptedaccepted
By: Stan A. SzlapetisDirector of Software Services
Retail LinkRetail Link
Wal-Mart will NOT use the EPC Network at Wal-Mart will NOT use the EPC Network at this timethis time
Wal-Mart will use Retail Link hosted by Wal-Mart will use Retail Link hosted by UCCnetUCCnet
Primary method for sharing EPC Primary method for sharing EPC informationinformation
Allows Suppliers to see the same Allows Suppliers to see the same information that Buyers and information that Buyers and Replenishment Managers can seeReplenishment Managers can see
By: Stan A. SzlapetisDirector of Software Services
Where Are My ProductsWhere Are My Products
Retail Link will allow you to see where Retail Link will allow you to see where in the supply chain your product isin the supply chain your product is In Transit or in DCIn Transit or in DC DC & Store Stock OutsDC & Store Stock Outs DC in Yard - not yet receivedDC in Yard - not yet received EPC Updates will be done at DC EPC Updates will be done at DC
Receiving, DC Shipping, Store Receiving, DC Shipping, Store Receiving, Backroom to Store Floor, Receiving, Backroom to Store Floor, DestroyedDestroyed
By: Stan A. SzlapetisDirector of Software Services
Recent ResultsRecent Results
Wal-Mart commissioned the University of Wal-Mart commissioned the University of Arkansas to conduct an independent studyArkansas to conduct an independent study
Wal-Mart RFID Trial Shows 16% Reduction In Wal-Mart RFID Trial Shows 16% Reduction In Product Stock-OutsProduct Stock-Outs
Study also shows that RFID-equipped stores were Study also shows that RFID-equipped stores were 63% more effective in replenishing out-of-stock 63% more effective in replenishing out-of-stock merchandise compared to stores without the merchandise compared to stores without the technology.technology.
An RFID tagged item made it to the shelf three An RFID tagged item made it to the shelf three times quicker than a non-tagged item.times quicker than a non-tagged item.
These items were identified as being in the back These items were identified as being in the back room three times quicker than those without RFID room three times quicker than those without RFID tags.tags.
By: Stan A. SzlapetisDirector of Software Services
2006 & 20072006 & 2007
In 2006, Wal-Mart will double the number In 2006, Wal-Mart will double the number of stores that are RFID-enabled, along with of stores that are RFID-enabled, along with distribution centers that service stores. By distribution centers that service stores. By the end of 2006, more than 1,000 stores, the end of 2006, more than 1,000 stores, clubs, and distribution centers will be using clubs, and distribution centers will be using RFID. In January 2007, Wal-Mart expects RFID. In January 2007, Wal-Mart expects the next wave of 300 suppliers to start the next wave of 300 suppliers to start shipping tagged cases and pallets. That will shipping tagged cases and pallets. That will bring the total number of suppliers using bring the total number of suppliers using RFID in early 2007 to over 600. RFID in early 2007 to over 600.
By: Stan A. SzlapetisDirector of Software Services
Wal-Mart & Target EPCWal-Mart & Target EPC
Oct. 17, 2005—Oct. 17, 2005—TargetTarget and and Wal-MartWal-Mart, , two of the largest retailers in the two of the largest retailers in the United States, are sharing United States, are sharing Electronic Electronic Product CodeProduct Code ( (EPCEPC) data with 13 ) data with 13 manufacturers as part of a pilot. The manufacturers as part of a pilot. The data is being transmitted in a data is being transmitted in a standardized format via an Internet-standardized format via an Internet-based based electronic data interchangeelectronic data interchange called applicability statement 2 (AS2). called applicability statement 2 (AS2).